Ithaca Energy Inc - Exploration Portfolio Update

Ithaca Energy Inc - Exploration Portfolio Update 
ABERDEEN, SCOTLAND -- (Marketwired) -- 05/13/13 --  Ithaca Energy
Inc. (TSX VENTURE: IAE) (LSE: IAE) 


 
 
Not for Distribution to U.S. Newswire Services or for Dissemination in
the United States
 
                          Ithaca Energy Inc.
 
                     Exploration Portfolio Update
 
                             13 May 2013
 
Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) ("Ithaca" or the "Company")
announces the execution of a farm-out transaction with Shell UK Limited
("Shell") in respect of the UK exploration assets acquired pursuant to
the acquisition of Valiant Petroleum plc ("Valiant"), completed on 19
April 2013 (the "Acquisition").The Company has now substantially
reduced its exposure to all remaining firm UK exploration well
expenditure commitments transferred as part of the Acquisition.The
Company also confirms the commencement of the Norvarg appraisal well,
operated by TOTAL E&P Norge, in PL535 located in the Barents Sea.
 
Summary
 
Since the announcement of the Acquisition, the Company has reduced its
net exploration expenditure commitments by over $45 million. This
leaves approximately $30 million of remaining committed UK exploration
expenditure, mainly consisting of the Handcross well.
 
The costs of the committed exploration and appraisal wells transferred
to Ithaca as a result of the Acquisition were accounted for in the
price paid for Valiant, with no exploration success assumed from those
wells.
 
The Company will continue to pursue farm-outs and divestments of the
existing UK exploration license interests to further minimise
exploration expenditure, whilst continuing to be exposed to the
potential upside associated with several high impact wells.
 
Beverley Farm-Out
 
Ithaca has entered into an agreement with Shell to farm-out half of the
Company's 40% non-operated interest in UK license P1792, covering
blocks 21/30f and 22/26c in the Central North Sea. The farm-out is in
exchange for a partial carry of Ithaca's 20% share of the costs of a
well on the Beverley prospect, with the license terms requiring the
well to be drilled by early 2015.The license contains the Beverley
prospect and the Belinda and Evelyn discoveries.The Beverley prospect
lies on the flank of an undrilled salt diapir, analogous with other
structures in the area, and is located close to the Shell-operated
Gannet fields.
 
The agreement with Shell is subject to normal regulatory consents.
 
Norwegian Appraisal Well Spuds
 
The Company also confirms an appraisal well (7225/3-2) on the Norvarg
discovery, located in PL535 in the Norwegian sector of the Barents Sea,
has commenced.The well, operated by TOTAL E&P Norge, is being drilled
to prove up the volume potential in the north-eastern segment of the
Norvarg closure.Drilling operations (not including testing) are
anticipated to last for at least 70 days.
 
The Norwegian exploration and appraisal portfolio transferred from
Valiant benefits from the 78% tax refund system that the Norwegian
government has in place, thus enabling the cost exposure to exploration
risk to be substantially mitigated.
 
A full update of all the exploration and appraisal opportunities
acquired from Valiant will be made available on the Ithaca website in
June 2013.
 
Enquiries:
 
Ithaca Energy:
Iain McKendrick,    imckendrick@ithacaenergy.com
CEO                                                +44(0) 1224 650 261
Nick Muir, CTO      nmuir@ithacaenergy.com         +44(0) 1224 650 267
 
FTI Consulting:
Billy Clegg         billy.clegg@fticonsulting.com  +44 (0) 207 269 7157
Edward Westropp     edward.westropp@fticonsulting.com
                                                   +44 (0) 207 269 7230
Georgia Mann        georgia.mann@fticonsulting.com +44 (0) 207 269 7212
 
Cenkos Securities
plc:
Jon Fitzpatrick     jfitzpatrick@cenkos.com        +44 (0) 207 397 8900
Neil McDonald       nmcdonald@cenkos.com           +44 (0) 131 220 6939
 
RBC Capital
Markets:
Tim Chapman         tim.chapman@rbccm.com          +44 (0) 207 653 4641
Matthew Coakes      matthew.coakes@rbccm.com       +44 (0) 207 653 4871
 
About Ithaca Energy:
 
Ithaca Energy Inc. (TSX: IAE, LSE AIM: IAE) is an oil and gas operator
focused on North Sea production, appraisal and development activities.
The Company's strategy is centred on building a highly profitable
North Sea oil and gas company by maximising production and cashflow
from its existing assets, the appraisal and development of existing
discoveries on properties held by the Company and the delivery of
additional growth via acquisitions and licence round participation.
 
Not for Distribution to U.S. Newswire Services or for Dissemination in
the United States
 
Forward-looking statements
 
Some of the statements and information in this press release are
forward-looking. Forward-looking statements and forward-looking
information (collectively, "forward-looking statements") are based on
the Company's internal expectations, estimates, projections,
assumptions and beliefs as at the date of such statements or
information, including, among other things, assumptions with respect to
production, future capital expenditures, future acquisitions and cash
flow. The reader is cautioned that assumptions used in the preparation
of such information may prove to be incorrect. When used in this press
release, the words "anticipate", "continue", "estimate", "expect","may",
"will", "project", "plan", "should", "believe", "could","target" and
similar expressions, and the negatives thereof, whether used in
connection with operational activities, production forecasts,
budgetary figures contained in the corporate presentation, potential
developments or otherwise, are intended to identify forward-looking
statements. Such statements are not promises or guarantees, and are
subject to known and unknown risks, uncertainties and other factors
that may cause actual results or events to differ materially from those
anticipated in such forward-looking statements. The Company believes
that the expectations reflected in those forward-looking statements are
reasonable but no assurance can be given that these expectations, or
the assumptions underlying these expectations, will prove to be correct
and such forward-looking statements included in this press release
should not be unduly relied upon. These forward-looking statements
speak only as of the date of this announcement. Ithaca Energy Inc.
expressly disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statement contained
herein to reflect any change in its expectations with regard thereto or
any change in events, conditions or circumstances on which any
forward-looking statement is based except as required by applicable
securities laws.
 
                                -ENDS-
 
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